Wednesday’s selloff in bonds accelerated into the morning, pushing yields on 2- through 7-year Treasurys up by as much as 10 basis points each, while lifting the 10-year yield to 3.99%. The moves were driven by data showing an expansion of China’s manufacturing activity and an unexpected acceleration in German inflation. Meanwhile, traders boosted the odds of a half-of-a-percentage-point rate increase in March to 32%, and saw a 42% likelihood that the fed funds rate will end up between 5.5% and 5.75% by September.
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